Renting a car from Lisbon into Spain

There shouldn't be a problem renting a car from Lisbon and taking it into Spain (but of course check with the rental company). The issue is, where are you going to return the car? If you pick it up in Portugal and return it in Spain, there will be a surcharge; this can be hundreds of euros. If you pick up and return in the same country (even in different cities), there is usually no extra fee, or it's low.

With a group, the drop charge may still be worth it to you for convenience. As you're learning, transportation links between Spain and Portugal aren't great. There are a very few trains (often leaving at inconvenient hours), there are some buses, and there are flights (which often work out best, but still take some time end to end).

Where in Spain did you want to go from Lisbon? What parts of Portugal and Spain do you want to see on this trip? Do you already have your flights at the beginning and end of your trip booked, and if so, what are they? The answers to these questions will determine the best options for your particular trip.

I have hired a car in Portugal and they charged €30 to allow me to take it into Spain, but I returned it to Portugal.

A one way drop will be very expensive. Plus, if you use the toll roads in Portugal, you would have the problem of how to pay if you returned the vehicle in Spain.

Suggest an alternative such as Amoita car rental in Lisbon. We have rented cars from Kenwell and Autoeurope in France, Spain and Italy with no problem. We had a problem with a consolidator out of England in Madrid. EuroCar saved us at the Madrid airport, no change in cost. For our Portugal trip, Auroeurope would not commit to cost for drop off in Faro. Read the fine print. Amoita's fine print is in bold letters! In my searches it seemed costs were very close, it was the add on's and fine print that differed. We spent 32-33 E per day for a five door entry level car, transponder for new system roads, paid for old system toll roads in cash or CC, 3 days in Spain (21 E) and secondary drop off. Amoita will not let you choose to utilize your CC auto coverage.

When I searched on Auto Europe's website, the rates were much cheaper than elsewhere.
I found out why:
The Avis drop charge from Lisbon to Barcelona and local taxes total an additional $570, at today's conversion from Euros.
Difference is payable locally when you pick up the car.

As my credit card his primary coverage, the rate without the extra insurance cover saves $200.

Total for 16 days - $1, 281 for a Renault Megane diesel with manual transmission. Gas version ~ $60 less.

It was still cheaper than others that I checked. Europcar would not let this class car go one-way.

This was 15 whole years ago, and maybe times have changed and prices and inflation may affect things now, but for 3 of us we rented a car in Lisbon (think this was Hertz, but might have been another rental company -- we looked at several options before making our decision), and turned it in in Spain something like a week and a half earlier. We paid something close to $600 extra for the open-jaw convenience, not having to return the car within Portugal, find our way somehow across the Spanish border (with luggage) to a place they could rent us anther car, then eventually turn in a second, Spanish rental car in Spain.

So it wasn't fee free, but at the time it was worth not having to back-track through Portugal before heading to Spain, and although it strangely took a really long time (over an hour at the counter) to pick up our pre-reserved-and-paid-for car in Lisbon, the rest of the process went smoothly. Having our own wheels let us set our own itinerary and schedule, including seeing Sintra. Obidos, and Evora in Portugal, then on to Arcos de la Frontera and other places in Spain. This was back in 2002, and your situation might be different now, but for better or worse, it has been done.